RBI’s Revised Guidelines on Minor Accounts – 2025 Update for Banks and Customers

✅ Minor Accounts Through Guardians

Minors of any age are now officially allowed to open savings and term deposit accounts through their natural or legal guardians. The RBI has explicitly included mothers as eligible guardians, ensuring gender-neutral access.

This provision enables parents to start financial planning for their children early and helps inculcate financial habits from a young age.

✅ Independent Accounts for Minors Aged 10 and Above

Minors who are 10 years or older can now open and operate their own savings or term deposit accounts, subject to specific conditions and limits.

• Banks must define such conditions in line with their risk management policies.
• The terms of operation must be clearly communicated to the minor account holder.

This move supports early financial independence and responsibility.

Tip for Banks: Create tailored products for tech-savvy youth, with appropriate checks to ensure security and compliance.

✅ Guidelines on Attaining Majority (Turning 18)

Upon reaching the age of 18, account holders must go through a re-verification process:

• Fresh operating instructions and specimen signatures must be obtained.
• If the account was previously managed by a guardian, the balance must be confirmed.
• Banks are advised to proactively notify minors approaching adulthood about these steps.

✅ Optional Facilities Based on Risk Policy

Banks are now permitted to offer the following to minor account holders, based on internal risk frameworks:

• Internet banking
• ATM/debit cards
• Cheque books

These facilities should be offered after assessing product suitability and customer appropriateness. Banks must ensure robust monitoring to prevent misuse.

❌ No Overdrafts Allowed

RBI has maintained a strict directive: Minor accounts must not be overdrawn and should always maintain a credit balance.

This is a vital safety measure that protects minors from unintentional debt and ensures responsible banking behavior.

🔍 Customer Due Diligence (CDD) Is Mandatory

As with all bank accounts, customer due diligence (CDD) is mandatory:

• Banks must carry out full KYC at the time of account opening.
• Ongoing due diligence must be performed periodically.

This applies regardless of whether the account is operated independently by the minor or via a guardian.

🕒 Implementation Timeline for Banks

Banks are expected to align or revise their policies by July 1, 2025. Until then, existing procedures may continue, but action should be taken well in advance to ensure a smooth transition. The guidelines have been issued under the Banking Regulation Act, 1949 (Sections 35A and 56), making them legally enforceable.

📄 Read the Official RBI Notification

For complete details and legal reference, you can read the official RBI circular here: 
RBI Notification, April 21, 2025
.

Final Thoughts :

The RBI’s updated circular on minor accounts represents a progressive step in balancing youth empowerment with responsible banking. By allowing minors aged 10 and above to manage their finances (within controlled limits) and permitting optional modern banking services, the RBI is nurturing a future generation of financially literate citizens.

At the same time, the safeguards ensure that the transition to financial independence is safe, compliant, and well-supervised. Banks should seize this opportunity to innovate, educate, and engage with young customers while fulfilling regulatory obligations.

✅ Must-Know: New RBI Digital Lending Rules 2025 – What Borrowers Should Know

✅ Latest Update: New Nomination Rules in Banks – April 2025